Builder Confidence Rises 8 Points in Two Months

Builders nationwide are the life-source of the National Association of Home Builders (NAHB).  The input of builders nationwide has helped this organization keep its finger on the trends of the housing market.  Feedback from its members has made the NAHB a truly representative organization which has been strong valued and listened to in Congress.  Sweeping legislative changes have either been pushed through or reversed because of the input of small to medium-sized, to large, production builders in small and large markets throughout the United States.  In order for the NAHB to stay in touch with how housing trends are shaping up in all regions of the country, the Association, along with lending institute Wells Fargo conducts a monthly survey to evaluate builder confidence in the real estate market.

Their results are published each month in the NAHB/Wells Fargo Housing Market Index (HMI).   The survey allows points for builders’ attitudes toward the following three real estate topics: current sales conditions, prospective buyers, and expectations for future sales.  Any “score” that is higher than 50 is considered good – that builders are feeling positive about the housing market.  With a slight dip in the HMI score earlier in 2014, builder confidence rose 4 points in June, 2014 to 49.  In July, however, the numbers strongly rebounded again with builder confidence rising to 53. Builder confidence numbers have not been above 50 since January, 2014, so the sharp increase in 2 months is a good indication that builders are feeling better about the real estate industry in general.

All three HMI components posted gains in July. The index gauging current sales conditions increased four points to 57, while the index measuring expectations for future sales rose six points to 64 and the index gauging traffic of prospective buyers increased three points to 39. The housing inventory also currently stands at 4.5 months, which is “typical” for a normal housing market.  During the worst parts of the Recession, inventory would sometimes climb to a 16-month to 24-month inventory depending on different regions of the country.

Locally in St. Tammany Parish, new home sales and resales have both been higher than 2013, which has been an indication of a stronger-than-ever housing market.  Ron Lee Homes is currently taking orders for new and custom home designs for interested buyers.  Contact Us at 985-626-7619 or E-mail

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